INTERVIEW/ De Lotto (EESC): “Europe is lagging behind by 20 years. Capital markets union needed”

Brussels – Strategic autonomy is a concept being talked about in European institutions with increasing urgency and insistence. The world has changed rapidly and, as European Economic and Social Committee advisor Pietro De Lotto explained to Eunews, Europe had lagged 20 years behind. Now much is moving, but some key pieces are still missing, starting with the unification of capital markets. 

Eunews: Councilor De Lotto, how did we come to talk about strategic autonomy?

Pietro De Lotto: It is a concept launched a few years ago but has undergone several modifications. At the European level, we initially talked about “Open strategic autonomy.” In the last 25 years, Europe has had a position of total openness in the world market. We have probably had an excess of confidence in the potential of open competition: starting in 2002 (China’s first year as a member of the WTO, Ed.), we began to delegate some fundamental activities, starting with manufacturing, to others, trusting that we could exclusively maintain the financialisation of the economy. At the same time, we delegated our energy supply to another partner, Russia. Finally, we totally relied on traditional trans-Atlantic relations as far as the defence was concerned. To this, it must be added that we did not safeguard and promote a domestic capital market. Hence, the need to reconsider not our interdependencies but our dependence, which has become very strong. In these 20 years, the accumulated delays have been great.

E: Do you think we were able to rebalance the situation?

P.D.L.: With difficulty, we managed to do that, yes. This despite the fact that we have not achieved the internal energy market, we have not formed the banking and capital union, nor have we strengthened our own way, a “European way”, in some strategic sectors. I am talking about telecommunications systems, supply chains related to the defence industry and critical raw materials. The new geopolitical situation meant that the position we had built, an agglomeration of different interests, was no longer bearable. 

E: What would you highlight about the ReArm EU plan?

P.D.L: I think the disruptive aspect was the words of Ursula von der Leyen yesterday (March 19), who said that she does not expect ReArm plan funds to be used for purchases outside Europe, where we currently spend, depending on estimates, between 60 and 80 per cent of our resources. This is something really important. 

E: What is the most difficult challenge facing Europe?

P.D.L.: The most complicated area is critical raw materials because we do not produce them. Here, the diversification of supplies is crucial. It is almost never mentioned, for example, that the EU signed before the war a joint exploitation agreement with Ukraine. However, I think it is incumbent, though perhaps heterodox, to return to the capital market. Europe has an enormous production of savings and an enormous capacity to mobilise them, but without a banking and capital union, we risk benefiting our competitors. The need for strategic autonomy, which is now no longer “open,” also comes through here.